Pipe systems manufacturer Wavin (Zwolle / The Netherlands; www.wavin.com) reported a 6.1% year-on-year fall in operating profit (EBITDA) to EUR 64.9m in the second half of 2009, on sales down 21% at EUR 587m. The falls are lower than those experienced in the first half of 2009 – see Plasteurope.com of 02.09.2009 – where EBITDA dropped by 50% and sales by 31% year-on-year, and were considered by the company as a sign of stabilisation in the second half.

Full-year operating profit was 31% down on 2008 at EUR 110m, while sales fell by 27% year-on-year to EUR 1.16 bn. EUR 14.6m of non-recurring items are included in the full-year operating result, due primarily to costs relating to restructuring programmes throughout the group. Operating profit in the second half of 2009 was EUR 19.4m higher than in the first half of the year.

Wavin CEO Philip Houben said: “It needs little explanation that 2009 proved extremely challenging for Wavin. Due to the unprecedented slump in European construction markets we had to deal with a sales decline of more than 25%. The complete focus therefore was on cost reduction, cash-flow generation and balance sheet restructuring.”

He said major cost reduction programmes had been implemented that delivered savings ahead of the EUR 40m target the company had set at the onset of the economic crisis. “Thanks to these measures and lower input prices we saw a recovery of margins as the year progressed," Houben said, “Our shareholders supported us in the capital restructuring that significantly improved the company’s financial condition and enabled a considerable reduction of leverage. Our net debt almost halved to EUR 237m at year end.”

The company’s building and installation business unit (above ground plastic pipe and fitting systems and solutions), which represents 39% of Wavin’s total revenue, reported a 27% year-on-year fall in sales to EUR 453m in 2009, due primarily to the decrease in residential construction activities.

The civils and infrastructure business reported a year-on-year fall in sales of 26% to EUR 684m in 2009. The business unit accounts for 59% of the company’s total revenue. The water management segment was slightly more resilient during the year as a result of a continued focus on separating rainwater from waste water, Wavin said.

Geographically, all regions felt the impact of the economic crisis in 2009, although with varying impact and timing. Following the sharp decline in the first quarter, most markets saw a stabilisation of demand at relatively low levels towards the end of the year, the company said. In the north west Europe region, where sales fell by 14% and operating profit by 13% year-on-year, the falls were less marked than in all other regions.

Wavin said it expects that 2010 will not be an easy year, as construction markets are by nature late cyclical, consumer confidence remains hesitant and building statistics are not yet showing upward movement. It added that, although European statistics show signs of improving order intake and construction confidence, winter conditions at the start of 2010 were not helpful. The full benefits of all cost reduction measures Wavin has taken in the course of 2009 will be realised, the company said.

e-Service:
Wavin Second Half Year and Full Year 2009 results as a PDF document (85 KB)